RBS exits retail structured product market


Royal Bank of Scotland has announced it is pulling out of the retail structured products market.

The move comes as part of steps made by the bank to reduce the balance sheet of its markets business by the end of 2014, as announced in its 2012 full year results.

The bank also plans to halt its equity derivatives and peripheral market-making activities as part of the changes to the markets business.

The news arrives shortly after the bank announced plans to cut approximately 2,000 jobs by 2014.

The bank says the businesses that it plans to exit will be moved to a run-off organisation managed within the RBS markets division, where they will then go through a process of restructuring, asset sales and, where possible, business sales.

RBS also says that in all instances it will remain committed to delivering on its existing obligations to customers.

The end of last year saw RBS structured products managing directors Zak de Mariveles and David Lake leave the team.

As part of the bank’s realigned strategy for its markets division, it now plans to focus on its core fixed income product strengths across rates, currencies, asset backed products and credit and debt capital markets.

The Investment Bridge managing director Chris Taylor says: “The strategic decision of RBS is a high level one, revolving around RBS’s corporate restructuring. It is not something specific to structured products or the market for them, which continues to be buoyant.

“RBS book of own products will continue to maturity – and will do exactly what they said on the tin. This highlights a specific benefit of structured products, as opposed to say, an active fund manager closing a fund or shutting down, which spells immediate problems and difficult decision-time for investors and advisers.”